Indicators are analytical tools that are indispensable in assessing the market situation. Traders use them before making trades to get forex trading signals. There are many indicators, so it is impossible to name their total number. Below we will give brief reviews of only the most famous of them.
Why Do Traders Use Indicators?
Forex trading has a number of features. For example, the profit of the exchange player depends directly on how precisely they determine the direction of the movement of the value of the selected asset. It is for this reason that traders are interested in conducting an in-depth analysis that reveals recent market trends.
Each trading platform has charts. To evaluate them accurately, use analytical tools. It is highly specialized software, oscillators and indicators. A novice who takes the first steps in Internet trading does not know what to use, so he has difficulties selecting tools for analysis. We recommend paying attention to indicators such as MA, MACD and Bollinger Waves, which will be described slightly below.
It is important that the novice trader knows at least the basics of trading in the forex market. So he will understand how much the yield depends on price dynamics, and will conclude trades only when a new trend begins, or when quotes unfold for deep corrections. You can get the necessary information using trend and channel indicators, oscillators.
Review Of The Indicator «MA»
The analytical tool presented has several names. Some traders call it the moving average, while others are used to the acronym MA. The indicator described is considered one of the most famous. The principle of its operation is based on the calculation of average price indicators for a certain period of time. Moving average can be seen on the chart built into the shopping terminal. It is a long dynamic line.
The moving average provides technical signals in just two cases. This happens when:
- Quotes are moving relative to the moving average value, and the trend is getting uptrend or downtrend;
- Trend indicator MA breaks through, i.e. the trend changes the direction of movement.
On the basis of moving average, many trading systems are built on the market. Among their main distinguishing features it is necessary to distinguish simplicity and high efficiency. Forecasts are so accurate that on average they make a profit in 80% of cases.
Review Of The Indicator «Bollinger Waves»
As for the Bollinger Waves, they are a fairly effective analytical tool. This channel indicator by which we can determine the value of the asset due to the passage of price deviations and classical moving average. If you put Bollinger Waves on the chart, they will appear on it as a dynamic channel.
Supply of trade signals by the presented indicator is performed in two cases. This happens when:
- The value of the asset bounces from the specified level of the channel boundaries;
- The middle line of Bollinger Waves is crossed by a price line and moves along a certain direction vector.
The indicator described is ideal for analysis in aggressive trading. It served as the basis for creating a huge number of strategies. The maximum efficiency of such trading systems sometimes reaches 83%.
Review Of The Indicator «MACD»
Moving average convergence/divergence is a known oscillator type indicator. Traders use it to determine the strength of a trend, a reversal of quotes, prices in the specified range and other indicators. MACD is used in deep analysis. It can be used to get accurate trading signals.
The indicator is displayed as a pair of MA lines, each with its own period and histogram. Technical signals are provided if the MACD lines intersect and acquire a common motion vector, and the histogram grows or falls relative to the zero level on the chart.
All indicators listed above are operable, accurate and versatile. They are ideal for analysis and subsequent technical signals on the basis of which a profitable deal can be concluded. If you are interested in increasing your income, then don’t forget that much depends not only on assessing the market situation, but also on the broker. In this regard, we advise you to use the services of companies with a reliable reputation.